Transformation of councils needed to withstand Scottish Government budget cuts, Accounts Commission warns

Written by Jenni Davidson on 21 March 2019 in News

Councils have had a six per cent cut in revenue funding from the Scottish Government in real terms between 2013/14 and 2019/20

Budgeting - Image credit: Pixabay

Transformation of Scottish councils is needed for them to be able to withstand budget cuts from the Scottish Government in the face of rising demand, the Accounts Commission has warned.

In a review of Scotland’s local authorities, the auditor said “more fundamental, transformational changes” rather than simply savings and efficiencies were needed to address the “growing gap” between demand and resources, with some councils needing to increase the pace of change.

Councils have seen  a six per cent cut in revenue funding from the Scottish Government for councils to run day-to-day services in real terms between 2013/14 and 2019/20.

However, this is not evenly distributed among councils, with a quarter of Scotland’s councils seeing a double-digit drop in their revenue funding 2013/14.

The worst affected have been Western Isles, which lost 15.4 per cent of its funding between 2013/14 and 2018/19, followed by Shetland and Argyll and Bute.

With the majority of the budget split among councils on a population basis, the cuts do not take account of the additional cost of delivering services in rural areas or of levels of deprivation, meaning rural or councils with large areas of deprivation may have been particularly affected.

The report also highlights that councils now have less flexibility over how they use budgets, with the proportion of funding from the Scottish Government that is ringfenced for specific purposes increased from 6.6 per cent in 2018/19 to 12.1 per cent in 2019/20.

This has led to significant budget cuts in areas where councils can make savings, with planning and development services suffering a 28 per cent cut in budget, cultural services a 14 per cent cut and roads and transport losing seven per cent of its revenue between 2013/14 and 2017/18.

At the same time, direct charges for many services have risen by above inflation, with funeral costs one of the worst affected.

The cost of a burial plot increased by an average of 20 per cent, while the cost for burial services increased by 12 per cent.

Accounts Commission chair Graham Sharp said: “It’s important to recognise that councils are working hard to maintain and, in some cases, improve services.

“Now fundamental change is needed to ensure services meet the shifting demands of local communities, with councils working and collaborating with communities to deliver the change needed.

“Councils must now focus on changing how front-line services are designed and delivered.”

Local government body COSLA welcomed the report which it said “chimes heavily” with recent similar reports showing that despite substantial cuts in funding, councils are continuing to deliver essential services for their communities.

COSLA’s resources spokesperson Councillor Gail Macgregor said: “We hope that eventually our message will be heard by [the] Scottish Government, and they recognise our asks. We are not simply saying these things for the sake of it.

“Reports such as today’s from the independent Accounts Commission clearly outline the harsh reality that councils face on the ground in terms of frontline essential service delivery – and that the current financial treatment of local government is not sustainable nor in anyone’s interests especially our communities who rely on vital services.”

Scottish Labour said the report exposed the “brutal legacy” of the SNP’s cuts to council funding.

The party’s finance spokesperson James Kelly said: “We know across the country local authorities are struggling to keep up with demand and having to make brutal cuts and increase charges as a result. 

“It's simply horrifying that the cost of burying a loved one is soaring because of brutal cuts to councils.”

The party also highlighted that the report had found the attainment gap was not closing, despite it being a Scottish Government priority.

Scottish Labour education spokesperson Iain Gray said: “Nicola Sturgeon pledged that closing the attainment gap would be her top priority – but years of cuts to councils have completely undermined that aim. 

“This report should finally get the message through to SNP ministers that they can’t cut the attainment gap while cutting council funding.” 

Lib Dem local government spokesperson Councillor Peter Barrett commented: “Local authorities are faced with tough decisions to make ends meet.

“This extra burden on bereaved families is a direct result of the SNP’s unsatisfactory settlement for local government. It’s a financial hardship that comes at an especially difficult time.

“The Scottish Government has a duty to ease the pressure on struggling local authorities.

“Ministers must provide them with the funding and economic levers necessary to properly tackle local priorities.”

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